NIH rejects March-In petition, also rejects proposed rules on pricing of and access to government funded inventions

In a decision dated November 1, 2013, and signed by NIH Director Francis Collins, the NIH has rejected the 2012 petition to the NIH to uses its powers under the Bayh-Dole Act to protect U.S. consumers from high prices and restrictive licensing of NIH funded inventions.

The 2012 March-In petition (copy here: http://keionline.org/2012ritonavir) centered on ritonavir, a drug used to treat HIV/AIDS and Hepatitis, but also asked the NIH to adopt policies that would apply to any drug or medical invention, and raised two issues of broad policy ramifications.

The first issue concerned the price of the drug, and was fairly straightforward -- Abbott was charging US private sector consumers 4 to 10 times more for the use of ritonavir than the prices the company charged in other high income countries. The petition asked the NIH to adopt a policy that considered price discrimination against U.S. citizens to be an abuse of the patent right.

The second issue concerned the obligation to license NIH funded patents for use in follow-on inventions, when the patented invention could be useful to "prevent, treat or diagnose medical conditions or diseases involving humans."

In the NIH March-In case, KEI, PIRG, UAEM and AMSA proposed specific rules to address these cases. On the pricing issue, the petitioners presented evidence that 13 of 14 surveyed drugs with NIH funded patents were significantly more expensive in the United States than in other high income countries. (http://keionline.org/node/1541). Note that the law on federally funded inventions includes an oblgiation for the patent owner to make the invention "benefits are to the extent permitted by law or Government regulations available to the public on reasonable terms." [35 USC 201(f)]

The NIH rejection included this conclusion:

Conclusion

The NIH is sensitive to the impact of the pricing of drugs and their availability to patients. As in 2004, when similar pricing and availability issues were raised and discussed at public hearings, the NIH's role in the present case is limited to compliance with the Bayh-Dole Act, including its march-in criteria, outlined and discussed in detail (above).

Drug pricing and patient access are broad and challenging issue in the United States. The NIH continues to agree with the public testimony in 2004 that the extraordinary remedy of march-in is not an appropriate means of controlling prices of drugs broadly available to physicians and patients.

In conclusion, as set forth in this determination, the information and justification provided in the Request, as well as publicly available information, do not support re-consideration of the NIH determination to decline to initiate a march-in proceeding for the Subject Patents used by AbbVie in the production of Norvir and other combination products. As stated in previous march-in considerations, the general use of drug pricing is appropriately addressed through legislative and other remedies, not through the use of the NIH's march-in authorities. The exercise of the Government's use license to the Subject Patents is not appropriate in this case. Finally, the NIH declines to set the rules proposed by the Requestors directing the initiation of such proceedings based on certain price disparities between the United States and other developed countries.

KEI will have a more extensive analysis of the NIH decision, but our initial comment is as follows:

Once again the NIH has demonstrated its indifference to the interests of taxpayers and U.S. consumers, when it comes to drugs invented on an NIH grant. In more than 32 years, the NIH has yet to grant a March-In petition, and it is apparent that the facts don't even matter. The NIH describes the March-In right as an 'extraordinary remedy.' They could have described it as a "phantom" or "non-existent" remedy, since it has never been used, by the NIH. In this decision, the NIH says that price discrimination, against US residents, on an NIH funded drug, is just fine as far as the NIH is concerned. The NIH was presented with a survey of 14 NIH funded drugs, and 13 of the 14 were priced significantly higher in the USA than in any other country. KEI, PIRG, UAEM and ASMA asked the NIH to grant march-in petitions when the US price was significantly higher than the prices in other high income countries. The NIH said no, and passed the buck to a Congress that has been famously responsive to drug company lobbies.

There were many other issues one can highlight with the 7 page rejection of the march-in petition. The NIH did not even acknowledge that Abbott's weak evergreening patent claims were the subject of challenges at the USPTO by the Public Patent Foundation. The NIH took the position that Abbott's refusal to license ritonavir for co-formulated AIDS or hepatitis drugs sold by competitors have no impact on public health. The NIH decision made it sound as though the public testimony in 2004 against the march-in was from disinterested parties, while all of the testimony against the march-in was from parties that were making money on NIH funded inventions.

At this point, we plan to appeal the NIH decision to the Secretary of HHS.

The following are additional comments.

Robert Weissman, President, Public Citizen

The American people have a right to expect that when their government's money is spent on pharmaceutical research and development, the resulting drugs are reasonably priced. The law gives U.S. government agencies the authority to satisfy this expectation. Unfortunately, the National Institutes of Health determination in the ritonavir case amounts to a declaration that the agency has no intention of exercising its authority. The NIH position is that the only quid pro quo expected of drug companies selling drugs invented on the public dime is that they place the drugs on the market. That is flatly unreasonable, and not a decision that will sit well with the American people. The Secretary of Health and Human Services should reconsider and overrule this misguided determination.

Reshma Ramachandran, American Medical Student Association (AMSA)

We as future providers are deeply disappointed that the National Institutes of Health has again failed to act on its sensitivity to the “impact of the pricing of drugs and their availability to patients.” As physicians-in-training, we are witness to our patients’ daily struggles to access quality, affordable medicines. It is unacceptable that the NIH, the largest funder of biomedical research, does not take responsibility to ensure that American citizens, our patients, do not have to pay twice for access to drugs developed through NIH grants – once through taxes and again through exorbitant prices set by pharmaceutical companies.